Coach’s Forum: Time to reboot your business?

But, for some reason, I increasingly find myself becoming less and less excited about the future. I seem to be spending more time on administration than doing the things I like to do – working with clients, planning portfolios, making investment choices and so on. Business has slowed down a bit, yet I know I could continue to grow my practice if I was motivated to do so.

But, to be truthful, if that means spending the next 15 years working the same way, I am not really inspired to do that.

Any thoughts on how to break out of this funk?

Coach says: Ah, the old, familiar entrepreneur’s curse! If you can take any solace from this: know that you are not alone.

After more than 20 years of coaching, I have seen enough financial advisors in similar situations to accept the reality of this curse. Let me see if I can describe what’s happened to you and your business, based on my experience.

I am willing to bet that as your business grew, you didn’t notice there were dangers lurking in the shadows of your success. The first was insidious, although you now feel its effect. As your practice expanded, it inevitably became more complex – the number of clients increased, product offerings broadened, service standards rose, compliance tightened, your support team grew – thus escalating demands on you for managerial and administrative duties to a point that they take more of your time than the crucial duties of managing client relations and business development.

Given that you came into our industry to be an advisor, not a manager, unless you have someone to whom you can delegate some of those responsibilities, you find yourself focusing more of your time on bottom-line profitability and less on generating top-line revenue.

Because the pace of this change was relatively slow and your business is cloaked in success, you didn’t immediately know you had hit this “ceiling of complexity.” Nevertheless, one day, you woke up with a vague uneasiness that your business should somehow be more fun and satisfying. You know you could continue to grow your business, but that would further outstrip your ability to manage your practice effectively and still practise your profession as a financial advisor.

So, you began to rely on market gains, additional needs among existing clients and casual referrals for new revenue. You are in charge of the momentum of your business no longer.

The second pitfall you probably have encountered is what I refer to as the “irony of success”: what got you where you are won’t keep you where you are. Advisors often fail to recognize that there is a Darwinian theory of evolution that applies to their practices just as much as it applies to the growth and adaptation of organisms to their environment. Every enterprise has a natural lifespan, at the end of which the business inevitably will start to slow and eventually decline – unless it is re-engineered to adapt to the business environment that has evolved around the practice.

Unfortunately, too many advisors don’t fully appreciate this need for “regeneration,” so they ride a good thing too long. For example, by the time they realize that the key metrics of their business are trending downward, regaining the momentum those advisors once had may be difficult.

The good news is that there is a straightforward solution that seems to work for a lot of advisors: you need to conduct a deep-down analysis of your practice, so you can reinvent your business and set it back on a path to the next stage of growth. But here is the challenge: you have to accept that only by giving your practice new direction before it is necessary will continued growth be assured.

This situation presents a real paradox for many advisors, however, because it means making significant changes just as their practice is nearing its peak and flourishing. And that flies in the face of the old “If it ain’t broke, don’t fix it” advice we all have heard so often.

– What can be done?

So, what can you do to reinvent, re-energize and reinvigorate your business and yourself?

Because every practice situation is different and every advisor has his or her own strengths, weaknesses and motivation, there is no “one size fits all” solution. However, here are some things other advisors have done to start a fresh life cycle for their businesses:

– Revise your vision for your business

Set a new target for growth. Redefine what you want your practice to look and feel like that is different from today. Decide how you are going to spend your time and what resources will be needed to ensure everything else will get done.

– Enter a new market

Identify a new group of prospective clients with whom you feel you would like to work. Create a marketing plan to attract them to your business and an effective process for converting them to clients.

– Rebrand your practice

Create a fresh identity that conveys a new, exciting image and announces that you are moving forward with the times.

– Redefine your value proposition

Add new products, services and capabilities. Segment your client base and align services with client value.

– Restructure operations

Introduce new systems and procedures. Hire additional staff or consider outsourcing some tasks to provide more time for advisory activities.

– Change your business model

Convert to a fee-based model. Shift the emphasis in your practice from sales to service.

– When should this be done?

Knowing that you need to make a change is one thing, actually doing it – and at the right time – is another.

Some people believe that you’ll only recognize the right time in hindsight, after the slowdown has started. To avoid that, I recommend a formal, in-depth review of your practice every few years, followed by a well-designed action plan and a way to hold yourself accountable for the things that you want to change rather than waiting until the gloom sets in.

Given your admission of discontent, I believe you are ahead of the game right now and at a point of inflection in your business. Hopefully, your malaise is enough to motivate you to take action before any significant decline takes hold.

– Who should lead?

This is not intended to be self-serving, but there is a school of thought that suggests you should not be the person leading the reinvention of your business. The argument is that you still will have to run your practice as it exists today until any significant changes you make take effect. Also, as noted, you could find abandoning some of the “old ways” difficult because your business still is doing well.

Because you have been responsible for your business’s ride to success, you may find letting go of past glories emotionally challenging.

Regardless of whether you engage someone to help you through the analysis and re-engineering process or you go it alone, approach the exercise with a healthy skepticism about your business. Challenge the assumptions on which it was built to see if they still make sense in today’s world. One of my favourite questions for advisors to ask themselves: “If we didn’t exist today, how would we invent ourselves?”

As noted, making changes takes foresight and courage when the need is not yet obvious. If you seriously re-examine your business periodically, you could reinvent yourself and your practice several times over the course of your career.

But let me assure you that reinvention gets easier each time. Each “revisioning” becomes ingrained in the fundamentals of your business and you will start the next reinvention from a higher plateau.

George Hartman is CEO of Market Logics Inc. in Toronto. Send questions and comments regarding this column to george@marketlogics.ca. George’s practice-management videos can be viewed on www.investmentexecutive.com.

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